Investing in the Pain of Student Debt Is a Tough but Tempting Play

As a college student in the early 1990s, Charles Trafton worked nights at a student-loan collection agency in Boston’s theater district, calling trucking and beauty school dropouts to ask them for money. As a professional investor more than two decades later, he has bet that shares of companies like his former employer will sink, which has become one of his most lucrative investment ideas. “My experience in call centers, specifically doing collections, I think gave me a huge interest in this space,” said Mr. Trafton, 48, who runs a small investment firm in Andover, Mass., called FlowPoint Capital.